MAHALLA EL-KOBRA, Egypt — Egyptian police attacked protesters who tore down a billboard of President Hosni Mubarak in a northern city Monday in the second day of violence fueled by anger over low wages and rising prices.

In another sign of dissatisfaction with the U.S.-backed government, the country's most powerful opposition group, the Muslim Brotherhood, said it was reversing a decision to participate in local elections today because of mass arrests of its members in recent months.

Prices of cooking oil, rice and other staples have nearly doubled since the beginning of the year and there are widespread shortages of government-subsidized bread throughout the country of 76 million people. Nearly 40 percent of Egyptians live under the internationally defined poverty line of $2 a day. Complaints that the government is not doing enough to help the poor have turned simmering dissatisfaction with repression and lack of economic opportunity into rare open unrest.

Thousands of demonstrators torched buildings, looted shops and hurled bricks at police in the Nile Delta city of Mahalla el-Kobra on Sunday. Nearly 100 others were arrested elsewhere in protests over economic problems. Thousands skipped work and school and hundreds protested.

Protesters stormed City Hall in Mahalla, burned tires in the streets, smashed chairs through shop windows and ran off with computers. At least two schools were set ablaze and facades of banks were vandalized. The police responded with tear gas and detained more than 500 protesters, according to a report by Al Masry-alyoum, an independent Cairo newspaper.

Protesters, including families of 300 residents and textile workers detained since Sunday, tried to meet with visiting Prosecutor General Abdel Meguid Mahmoud. When they failed, they stoned his motorcade, an Interior Ministry spokesman, who asked not to be identified, said. Mahalla is the center of Egypt's textile industry.

Several hundred young men massed in Mahalla's main square on Monday, throwing rocks at a billboard of Mubarak and slashing it with knives before toppling it.

Riot police charged the group, firing heavy volleys of tear gas, pulling some of the men to the pavement and beating them with batons or fists. Protesters threw stones or canisters of tear gas at the police.

At least 25 people were arrested, and 15 protesters and five policemen were hurt, security officials said on condition of anonymity because they were not authorized to talk to the media.

The government appears worried by the unrest and lifted import duties on some food items last week in an effort to lower prices. It strongly warned citizens against participating in the strikes and demonstrations, which are illegal in Egypt.

The Muslim Brotherhood said Mubarak's administration also had arrested more than 1,000 of its members and potential candidates, detaining 400 after the group announced last month that it would take part in today's municipal elections.

The Brotherhood is a banned organization and its candidates run officially as independents, although their allegiances are generally known.

On Monday, the group urged supporters to boycott municipal polls, saying on its Web site that the elections "have already been fixed before being held."

Brotherhood lawyer Abdel-Moneim Abdel-Maqsoud said the government had disqualified most of the several hundred Brotherhood members who had registered as candidates, and that in the end only 21 members from the group were allowed to run. He said they would withdraw their candidacies.

A security official said around 30 figures believed to be connected to the Brotherhood had been allowed to run. The official spoke on condition of anonymity because he was not authorized to talk to the media.

"We feel we are not competing with a normal party but with a group of corrupt people who are willing to even resort to illegal and unethical means," the Brotherhood said. "The party of corruption and despotism is afraid of any contest."

The United States and international human-rights groups have criticized the Egyptian government's crackdown on the Brotherhood, but Washington has exerted little pressure for reform on Mubarak, one of its staunchest allies in the Middle East.

State Department spokesman Sean McCormack said Monday he hadn't seen reports on Egyptian protesters clashing with security forces but said Washington has "talked to the Egyptian government about the importance of political and economic reform."

"We always encourage countries in the region and around the world to do everything that they possibly can. And is there more to do? Absolutely. There's more to do in Egypt," McCormack said. "But fundamentally, they're going to have to arrive at their own decisions about the pace and the direction of this reform."

The Brotherhood scored surprise victories in 2005 parliament elections that gave it a fifth of the legislature's 454 seats. The local elections had been scheduled to take place in 2006, but were put off for two years, apparently out of fear of more Brotherhood gains.

Word of the strikes and demonstrations spread through social-networking Internet sites and blogs.

"Some students and bloggers waged a campaign on the Facebook Web [site] and gathered more than 70,000 supporters in several groups," said Alaa Alghatrifi, producer of Egypt's "10 PM" talk-show program, which has a following akin to Larry King's. "Some of them decided to go down in the streets to demonstrate, and others made up-to-the-moment coverage using the cellphone cameras and laptops."

The nationwide strike was the first major attempt by opposition groups to turn the past year's labor unrest in Egypt into a wider political protest against the government of President Hosni Mubarak. The strike and riots in the north began two days before key elections for local councils, causing worries in the government, which last week lifted import duties on some food items in an effort to soften economic discontent.

Said activist May Kosba: "We are living in a country that makes strikes, demonstrating and expressing your anger or disagreements in a peaceful way illegal, so people decided to express themselves illegally."

Material from Bloomberg News Service is included in this report.